MASTER STUDY GUIDE
Definitions • Keywords • Tricks to Remember
Chapters 1, 2 & 8 | Strategic Management, Organisational Structure & Control
HOW TO USE THIS GUIDE: Each concept has a simple definition, the keywords to spot
in exam questions, and a memory trick. Learn the tricks first — they will save you time in
any test.
CHAPTER 8: Control, Change & Entrepreneurship
This chapter is the most important for your recent quiz. Master these concepts first.
SECTION 1: The 3 Types of Control by TIMING
This is the most tested concept in Chapter 8. Learn these three and you will get every timing question
right.
FEEDFORWARD CONCURRENT FEEDBACK
BEFORE DURING AFTER
Definition: Prevents Definition: Monitors and Definition: Reviews results
problems BEFORE they corrects IN REAL TIME while AFTER the activity is done
happen the activity is happening and uses findings to improve
Keywords: checklists before Keywords: instantly, next time
starting, pre-screening, immediately, real-time, hourly Keywords: end of month
protocols before a procedure, data, alerts triggered now, review, post-analysis,
training before work begins correct deviations on the spot comparing before and after,
Weakness: steps sometimes Weakness: stress, burnout, no monthly/quarterly reports
skipped, not 100% preventive time for strategic thinking Weakness: too late — damage
already done by the time you
react
🔑 TRICK TO REMEMBER: Before = Feedforward. During = Concurrent. After = Feedback.
Just ask: WHEN does the control happen?
SECTION 2: The 3 Ways to Control People — Bureaucratic, Output &
Clan
CONCEPT KEYWORD TO SPOT WEAKNESS MENTIONED
Bureaucratic Control rules, procedures, strict slow decisions, no flexibility,
guidelines, paperwork, approval innovation declines, employees
layers, must follow frustrated
Output Control financial targets, budgets, ROI, managers game the numbers,
quotas, measurable results, cut corners to hit targets,
performance metrics dysfunctional behaviour
Clan Control shared values, culture, norms, some exploit lack of rules,
teamwork, no formal monitoring, inconsistent performance
autonomy between teams
Behaviour Control closely monitoring HOW people employees feel micromanaged,
work, correcting procedures, low morale despite productivity
training on process, gains
micromanaging
🔑 TRICK TO REMEMBER: Bureaucratic = RULES. Output = RESULTS. Clan = CULTURE.
Behaviour = HOW they work.
SECTION 3: Goal Setting — MBO, Stretch Goals & Org-Wide Goal
Setting
Management by Objectives (MBO)
Manager and employee JOINTLY set measurable goals together. Progress is reviewed
regularly. The 3 signs: (1) goals set together, (2) measurable targets, (3) regular reviews.
Weakness: some feel pressured by the targets.
Stretch Goals
Ambitious targets designed to push people to perform beyond normal. They are supposed to
be achievable WITH effort. When set without enough resources or workforce, they become
UNREALISTIC — workers cut corners to hit them.
Ineffective Goal Setting
When goals are simply set too high and never adjusted, causing stress, burnout and
declining productivity. The problem is the TARGETS themselves are unrealistic — not that
they were stretch goals.
Organisation-Wide Goal Setting
Goals are set and aligned across ALL levels — corporate, divisional, and functional — so
every level's targets point in the same direction. Each level's goals support the overall
strategy.
🔑 TRICK TO REMEMBER: MBO = goals set TOGETHER with manager. Stretch Goals =
ambitious but achievable (problem = no resources given). Org-Wide = goals cascade down
from top to bottom of the company.
SECTION 4: Types of Organisational Change
TOP-DOWN CHANGE BOTTOM-UP CHANGE
Driven by senior management Driven by employees/staff
Employees INFORMED but NOT consulted Staff contribute ideas and feel ownership
Fast to decide, slow to implement Slow to decide, high adoption rate
WEAKNESS: resistance from employees WEAKNESS: takes longer than expected
🔑 TRICK TO REMEMBER: Top-down = FAST decision, HIGH resistance. Bottom-up =
SLOW decision, LOW resistance. Who starts it? Managers = Top-down. Employees =
Bottom-up.
Organisational Change Process (the steps)
Step 1: Identify the problem → Step 2: Investigate causes → Step 3: Design interventions
(plan the change) → Step 4: Implement changes → Step 5: Evaluate outcomes (compare
before and after). This is different from the control process!
Change Evaluation
The LAST step in the change process. After implementing changes, you compare
performance BEFORE and AFTER to see if the change worked, and use findings to refine
future strategy.
🔑 TRICK TO REMEMBER: Change Process keywords: 'identifies problem → investigates
→ designs intervention → implements → evaluates'. Control Process keywords: 'sets
standards → measures → compares → corrects'. They sound similar but the change
process has a DIAGNOSIS step.
SECTION 5: Organisational Culture — Adaptive vs Inert
ADAPTIVE CULTURE ✅ INERT CULTURE ❌
Embraces change and innovation DISCOURAGES innovation
Rewards risk-taking and new ideas PUNISHES risk-taking
Employees empowered to experiment Employees stop proposing ideas
Result: stays competitive, flexible Result: stagnation, loses competitiveness
🔑 TRICK TO REMEMBER: Inert = STUCK. If the question says 'punishes risk', 'discourages
innovation', 'employees stop trying' → that is ALWAYS inert culture. Adaptive = the opposite.
SECTION 6: Benchmarking
Benchmarking
Comparing your own performance AGAINST OTHER COMPANIES (competitors or industry
leaders) and adopting their best practices to close the performance gap. The single biggest
keyword: 'compares with other firms / international firms'.
🔑 TRICK TO REMEMBER: If the question mentions comparing to EXTERNAL companies
or adopting industry best practices → always BENCHMARKING. It's the only concept that
looks OUTSIDE for comparison.
SECTION 7: Entrepreneurship vs Intrapreneurship
ENTREPRENEUR INTRAPRENEUR
Creates their OWN business Innovates INSIDE an existing company
Uses external funding/own resources Uses the company's internal resources/funding
Independent — not employed by anyone Still an EMPLOYEE of the firm
Takes personal financial risk Risk is borne by the organisation
Example: person who starts a delivery Example: employee who builds a new product
company for their employer
🔑 TRICK TO REMEMBER: INTRA = INSIDE. If they're an employee innovating at their job
= Intrapreneur. If they quit and start their own = Entrepreneur. The word 'internal funding' or
'within the company' = always Intrapreneur.
SECTION 8: The Organisational Control Process
Organisational Control Process (the 4 steps)
Step 1: Establish performance STANDARDS (set targets) → Step 2: MEASURE actual
performance → Step 3: COMPARE results to targets → Step 4: Take CORRECTIVE
ACTION if needed → then repeat. This cycle is continuous.
🔑 TRICK TO REMEMBER: Control Process = Standards → Measure → Compare →
Correct → Repeat. If all 4 steps appear in the question = Organisational Control Process.
CHAPTER 1: Strategic Management
Key concepts for identifying strategic problems and solutions in scenario questions.
SECTION 1: Entry Modes — How to Enter Foreign Markets
CONCEPT KEYWORD TO SPOT WEAKNESS MENTIONED
Exporting sells from home country to logistics problems, tariffs, limited
foreign market local responsiveness
Licensing gives another firm rights to use lose control over quality —
your product/brand licensee does what they want
Franchising company gives franchise rights quality issues if standards not
with more support than licensing enforced
Joint Venture two firms create a new company conflicts over control, unequal
together decision power
Foreign Direct Investment sets up own operations in foreign highest cost, highest risk,
(FDI) country (full ownership) highest control
🔑 TRICK TO REMEMBER: The more CONTROL you want = the more you must INVEST.
Low investment (exporting/licensing) = low control. High investment (FDI) = high control.
SECTION 2: Competitive Strategies
Cost Leadership
Producing at the LOWEST COST in the industry. You compete on price. Problem: cutting
costs too far reduces quality and kills customer satisfaction.
Differentiation
Making your product/service UNIQUE so customers are willing to pay more. Fails when
customers don't PERCEIVE the difference — the value proposition wasn't communicated or
delivered properly.
Focus Strategy
Targeting a NICHE market with either low cost or differentiation. Weakness: easy to copy if
you have no sustainable competitive advantage (barriers to entry are low).
🔑 TRICK TO REMEMBER: Cost = cheapest. Differentiation = unique. Focus = niche. If
competitors copy your model easily = no SUSTAINABLE competitive advantage.
SECTION 3: Diversification
Related Diversification
Expanding into a new industry that is RELATED to your current one — you share skills,
resources, or synergies across businesses.
Unrelated Diversification
Expanding into a completely DIFFERENT industry to spread risk. Problem: you have no
expertise or synergies in the new area — performance often declines.
Vertical Integration
Owning parts of your OWN supply chain — either forwards (buying a distributor) or
backwards (buying a supplier). Risk: reduces flexibility, ties up capital in fixed assets (asset
specificity).
🔑 TRICK TO REMEMBER: Unrelated diversification = spreading into random industries =
usually FAILS because no expertise. Vertical integration = going up or down your own
supply chain.
SECTION 4: Strategy Levels
CONCEPT KEYWORD TO SPOT WEAKNESS MENTIONED
Corporate-level Strategy What businesses should we be undermines business-level if
in? Overall portfolio decisions inconsistent
Business-level Strategy How do we compete in this good operations but wrong
specific market? direction if weak
Functional-level Strategy How do HR, Finance, Operations efficient but poor market position
support the strategy? if business strategy is weak
🔑 TRICK TO REMEMBER: Think of it as 3 floors: Corporate = top floor (big picture).
Business = middle floor (compete here). Functional = ground floor (day-to-day). They must
ALL align.
SECTION 5: Planning Horizons
Long-term vs Short-term Planning
Long-term plans set the strategic direction (years ahead). Short-term plans handle
operational reality (cash flow, daily tasks). PROBLEM: when long-term plans ignore short-
term constraints like cash flow = poor integration across planning horizons.
Rigid Planning Systems
Over-reliance on fixed long-term plans means the firm cannot adapt when sudden changes
occur (new regulations, crises). Good strategy requires BOTH planning AND flexibility.
🔑 TRICK TO REMEMBER: Long-term plan + ignores cash flow = planning horizon problem.
Long-term plan + can't adapt to sudden change = rigid planning system.
CHAPTER 2: Organisational Structure & Design
Key structural concepts — how firms organise themselves.
SECTION 1: Key Structural Concepts
CONCEPT KEYWORD TO SPOT WEAKNESS MENTIONED
Span of Control How many people one manager Wide span = fast but low
supervises supervision quality
Tall Structure Many layers of management Slow decisions, poor
(hierarchy) communication
Flat Structure Few layers, managers supervise Role ambiguity, managerial
many overload
Centralisation Decisions made at the TOP Slow, no local flexibility
Decentralisation Decisions made LOWER down / Strategy inconsistency across
locally regions
Hierarchy of Authority Who reports to who, who has Without it, conflicts can't be
final say resolved
🔑 TRICK TO REMEMBER: Tall = many layers = slow. Flat = few layers = fast but
overloaded. Central = control at top. Decentral = control spread out.
SECTION 2: Types of Organisational Structure
CONCEPT KEYWORD TO SPOT WEAKNESS MENTIONED
Functional Structure Grouped by function: HR, Silos — departments don't talk
Finance, Marketing etc. to each other well
Product/Divisional Structure Each product line has its own Duplication of functions across
team divisions = costly
Matrix Structure Employees report to BOTH Dual authority = conflict and
functional AND product ambiguity
managers
Geographic Structure Organised by region/country Brand inconsistency if too much
local autonomy
Market Structure Organised by customer type Divisions compete for resources
(corporate, SME, individual)
B2B Network Structure Outsources key activities to Dependency on partners =
partners/suppliers strategic risk
🔑 TRICK TO REMEMBER: Matrix = TWO bosses = confusion. Functional = departments
isolated = silos. Product/Divisional = each product team stands alone = duplication.
SECTION 3: Job Design
CONCEPT KEYWORD TO SPOT WEAKNESS MENTIONED
Job Simplification Narrow repetitive tasks for Demotivating, boring, poor
efficiency morale
Job Enlargement More tasks at the SAME level Still demotivating if no extra
(horizontal) autonomy given
Job Enrichment More RESPONSIBILITY and The right way to motivate
AUTONOMY (vertical) employees
🔑 TRICK TO REMEMBER: Enlargement = MORE tasks (still boring). Enrichment = MORE
POWER (actually motivating). The difference is AUTONOMY.
SECTION 4: Integrating Mechanisms & Design
Integrating Mechanisms
Tools used to improve COORDINATION between departments or divisions WITHOUT
changing the whole structure. Examples: liaison roles, cross-functional teams, task forces,
planning committees. Cost: adds complexity and expense.
Organisational Design vs Organisational Structure
DESIGN = the PROCESS of deciding what structure to use (happens before building).
STRUCTURE = the result — the actual system of reporting lines and authority. Design
comes first, structure is the output.
Line Authority vs Staff Authority
LINE authority = direct command (manager tells employee what to do). STAFF authority =
advisory only (expert gives recommendations but can't force compliance). Problem: line
managers often ignore staff recommendations.
🔑 TRICK TO REMEMBER: If something 'coordinates without restructuring' = Integrating
Mechanism. Design = planning the structure. Structure = the actual result.
MASTER CHEAT SHEET — Spot It in 5 Seconds
Use this page when you are stuck on a question. Find the keyword, find the answer.
IF YOU SEE THIS... ANSWER IS...
before / prevent / checklist before starting Feedforward Control
instantly / real-time / immediately adjust / alerts Concurrent Control
now
end of month / after the fact / too late to react Feedback Control
rules / procedures / approval layers / Bureaucratic Control
paperwork
financial targets / budgets / ROI / quotas Output Control
shared values / culture / norms / no formal Clan Control
rules
monitoring HOW people work / correcting Behaviour Control
procedures
goals set TOGETHER / measurable targets / MBO
quarterly review
ambitious targets + no extra resources = Poorly designed stretch goals
corners cut
goals aligned corporate → divisional → Organisation-wide goal setting
functional
compares with other firms / adopts industry Benchmarking
best practice
punishes risk / discourages innovation / Inert Culture
employees stop trying
embraces change / rewards risk / stays Adaptive Culture
competitive
driven by management / employees informed Top-down Change
not consulted
driven by employees / staff contribute ideas / Bottom-up Change
ownership
identifies problem → investigates → designs Change Process
→ implements → evaluates
standards → measure → compare → correct Control Process
→ repeat
starts own business / external funding / Entrepreneur
independent
innovates INSIDE company / internal funding / Intrapreneur
still employed
two bosses / dual authority / functional + Matrix Structure
product manager
departments don't coordinate / silos Functional Structure weakness
coordination without restructuring / liaison roles Integrating Mechanisms
/ task forces
deciding what structure to use / choosing Organisational Design
structure
loses quality control over licensee Licensing risk
conflict over unequal control in a shared Joint Venture risk
venture
THE GOLDEN RULE FOR EVERY QUESTION
1. Find the KEYWORD in the scenario
2. Ask WHEN? (before/during/after) for control timing questions
3. Ask WHO? (managers or employees) for change questions
4. Ask WHERE? (inside or outside the company) for entrepreneur questions
5. The WEAKNESS described in the question usually tells you the concept directly